Kesko Advances as Danske Says Buy on Turnaround: Helsinki Mover

March 5 (Bloomberg) -- Kesko Oyj, Finland’s largest
publicly traded retailer, climbed the most in four months after
Danske Bank A/S recommended clients buy the stock as cost cuts
and recovering sales promise to reverse a decline in earnings.

Kesko rose as much as 3.3 percent, the biggest intraday
gain since Oct. 26. Shares in the Helsinki-based company traded
up 2.9 percent at 24.37 euros at 10:59 a.m. in the Finnish
capital, the best performance among Finnish benchmark stocks.
About 80,000 shares traded, almost half the three-month daily
average, according to data compiled by Bloomberg.

The retailer expects to achieve most of its 100 million
euros ($131 million) cost saving target this year, Chief
Financial Officer Jukka Erlund said on Feb. 5. The company’s
fourth-quarter profitability was impacted negatively by
expansion in neighboring Russia, he said. Kesko posted a decline
in fourth-quarter pretax profit to 53 million euros from 74
million euros a year earlier.

“We believe that the declining earnings trend of the past
five quarters is about to reach a turning point,” analysts at
Danske Bank said today in a note. “This enables us to focus on
the attractive valuation potential.”

Danske Bank upgraded their recommendation to buy from hold
and raised the 12-month price target for Kesko to 30 euros from
25 euros.